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ENTREP > TOPIC 2: TRANSFORMING ENTREPRENEURIAL CONCEPTS INTO REALITY > Flashcards

TOPIC 2: TRANSFORMING ENTREPRENEURIAL CONCEPTS INTO REALITY Flashcards

1
Q

define Business plan
(3)

A

is a written document prepared by the
entrepreneur that outlines all applicable external and internal elements
-integration of functional plans such as marketing, finance, manufacturing, and human
resources
- addresses both short-term and long-term decision making for the first three years of
operation
-, sometimes referred to the game plan or road map,

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2
Q

What are the three questions that answers the Business plan

A

Where am I now? Where am I going? How will I get there?

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3
Q

What are the three perspectives that should be considered in preparing the plan

A

perspective of the entrepreneur
marketing perspective
eyes of the investor

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4
Q

The differences in the scope of the business plan may depend on whether the new venture is a _______involves _________, or is a __________ or __________.

A

service, manufacturing, consumer good, industrial product

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5
Q

The_______, ______, and _________ may also affect the scope of the business plan

A

size of the market, competition, potential growth

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6
Q

The business plan is valuable to the entrepreneur, potential investors, or even new personnel, who are trying to familiarize themselves with the venture, its goals, and objectives. The business plan is important to these people because:

A

-It helps determine the viability of the venture in a designated market.
-It provides guidance to the entrepreneur in organizing his or her planning activities.
-It serves as an important tool in helping to obtain financing.

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7
Q

The business plan should be ____________ enough to give any potential investor a complete picture and understanding of the new venture, and it should help the entrepreneur clarify his or her thinking about the business.

A

comprehensive

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8
Q

I. Introductory Page (outline)

A

NNN SS
A. Name and address of business
B. Name(s) and address(es) of principal(s)
C. Name of business
D. Statement of financing needed
E. Statement of confidentiality of report

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9
Q

II. Executive Summary (outline)

A

two to three pages summarizing the complete business plan

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10
Q

III. Industry Analysis (outline)

A

FAMI
-Future outlook and trends
-Analyzing competitors
-Market segmentation
-Industry and market forecasts

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11
Q

IV. Description Venture (outline)

A

PS SOB
-Product
-Service
-Size of the business
-Office equipment and personnel
-Background of the entrepreneurs

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12
Q

V. Production plan (outline)

A

MPMN
-Manufacturing process
-Physical plan
-Machinery and equipment
-Names of suppliers of raw materials

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13
Q

VI. Operations Plan (outline)

A

DFT
-Description of company’s operation
-Flow of orders for goods and/or services
-Technology utlization

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14
Q

VII. Marketing Plan (outline)

A

PDPPC
-Pricing
-Distribution
-Promotion
-Product forecasts
-Control

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15
Q

VIII. Organizational Plan

A

FIA MR
A. Form of ownership
B. Identification of partners or principal shareholders
C. Authority of principals
D. Management team background
E. Roles and responsibilities of members of organization

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16
Q

IX. Assessment of Risk

A

ENC
-Evaluate weakness(es) of business
-New technologies
-Contingency plans

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17
Q

XI. Appendix

A

LMLP
-Letters
-Market research data/Market Study
-Leases and contracts
-Price lists from suppliers

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18
Q

that provides a summary of the business plan’s contents

A

introductory page

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19
Q

introductory page should contain the following:

A

The name and address of the company.
* The name of the entrepreneur(s), telephone number, fax number, e-mail address, and
* Web site address if available.
* A paragraph describing the company and the nature of the business.
* The amount of financing needed. The entrepreneur may offer a package (e.g., stock or debt). However,
many venture capitalists prefer to structure this package in their own way.
* A statement of the confidentiality of the report. This is for security purposes and is important for the
entrepreneur.

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20
Q

sets out the basic concept that the entrepreneur is attempting to develop.

A

title page

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21
Q

prepared after the total plan is written

A

Executive summary

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22
Q

About t_____________________ in length,
the executive summary should ___________of the potential investor.
Thus, it should highlight in a ________ and ________manner the key points in the business plan

A

two to three pages, stimulate the interest, concise and convincing

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23
Q

Generally, the executive summary should address a number of issues or questions that anyone picking up the written plan for the first time would want to know. For example:

A

What is the business plan or concept?
Is the business plan or concept unique?
Who are the individuals starting the business?
How will they make money and how much?

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24
Q

is an assessment of external uncontrollable variables that may impact the
business plan. I

A

Environmental analysis

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25
Q

It is an assessment of ______________________ that may impact the
business plan. I

A

external uncontrollable variables

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26
Q

The entrepreneur should consider trends in the GNP, unemployment by geographic area,
disposable income, and so on.

A

Economy

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27
Q

An evaluation of cultural changes may consider shifts in the population by demographics

A

Culture

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28
Q

Advances in technology are difficult to predict. Being in a market that is rapidly changing
due to technological development will require the entrepreneur to make careful short-term marketing
decisions as well as to be prepared with contingency plans given any new technological developments
that may affect his or her product or service.

A

Technology

29
Q

There are many important legal issues in starting a new venture. The entrepreneur
should be prepared for any future legislation that may affect the product or service, channel of
distribution, price, or promotion strategy.

A

Legal concerns

30
Q

reviews industry trends and competitive strategies

A

Industry analysis

31
Q

Demand as it relates to the industry is often available from published sources.
Knowledge of whether the market is growing or declining, the number of new competitors, and possible changes in consumer needs are all important issues in trying to ascertain the potential business that might be achieved by the new venture

A

Industry demand

32
Q

Most entrepreneurs generally face potential threats from larger corporations. The
entrepreneur must be prepared for these threats and should be aware of who the competitors are and what their strengths and weaknesses are so that an effective marketing plan can be implemented.

A

Competition

33
Q

________ provides complete overview of the product(s), service(s), and operations of a
new venture

A

Description of venture

34
Q

Description of venture enable the investor to ascertain ___________of the business. This section
should begin with the mission statement or company mission o

A

the size and scope

35
Q

This section should begin with the mission statement or company mission of the new venture. This statement basically describes the __________ and what the entrepreneur hopes to accomplish with that business.

A

nature of the business

36
Q

This _________ or __________ will guide the firm through _________.

A

mission statement, business definition, long-term decision making

37
Q

Key elements are the (in description venture)

A

product (s) or service(s), the location and size of the business, the personnel and office equipment that will be needed, the background of the entrepreneur(s), and the history of
the venture

38
Q

. In assessing the building or space the business will occupy, the entrepreneur may need to evaluate such factors as

A

parking; access from roadways to facility; and access to customers, suppliers, distributors, delivery rates, and town
regulations or zoning laws.

39
Q

_______details how the product(s) will be manufactured

A

production plan

40
Q

If some or all the manufacturing process
is to be subcontracted, the plan should describe the

A

subcontractor(s), including location, reasons for selection, costs, and any contracts that have been completed

41
Q

If the manufacturing is to be carried out in whole
or in part by the entrepreneur, he or she will need to describe the ________layout; the ____________ needed to perform the manufacturing operations; ____________addresses, and terms; costs of manufacturing; and any future capital equipment needs.

A

physical plan layout
machinery and equipment
raw materials and suppliers’ names,

42
Q

All businesses—__________________—should include an __________ as part of the
business plan.

A

manufacturing or nonmanufacturing, operations plan

43
Q

It describes the flow of goods and services from production to the customer

A

Operations plan

44
Q

It might include inventory or storage of manufactured products, shipping, inventory control procedures, and customer support
services.

A

Operations plan

45
Q

A non-manufacturer such as a retailer or service provider would also need this section in the business plan to explain the ____________in completing a business transaction.

A

chronological steps

46
Q

major distinction between services and manufactured goods is
services involve ________performances.

A

intangible

47
Q

___________describes market conditions and strategy related to how the product(s) and service(a) will be ______, _________, __________.

A

Marketing plan, distributed, priced, and promoted

48
Q

Marketing planning will be an _____________ (with careful monitoring and changes made on a weekly or monthly basis) for the entrepreneur and should be regarded as the ________________

A

annual requirement, road map for shortterm decision making.

49
Q

________________describes form of ownership and lines of authority and responsibility of members of new
venture

A

Organizational plan

50
Q

he organizational plan is the part of the business plan that describes the venture’s form of
ownership—that is,_______, ________, _______

A

proprietorship, partnership, or corporation.

51
Q

_________ identifies potential hazards and alternative strategies to meet business plan goals and objectives

A

Assessment of risks

52
Q

It is important that the entrepreneur assess risk in the following manner. First, the
entrepreneur should ___________________________. Next should be a ____________________________________________. Finally, the entrepreneur should _________________________should they occur.

A

-indicate the potential risks to the new venture
-discussion of what might happen if these risks become reality
-discuss the strategy that will be employed
to prevent, minimize, or respond to the risks

53
Q

____________________is a projection of key the key financial data that determine economic feasibility and necessary financial investment commitment.

A

Financial plan

54
Q

three financial areas are discussed in this section of the business plan.

A
  • summarize the forecasted sales and the appropriate expenses for at least the first three years
    -cash flow figures for at least three years
  • projected balance sheet.
55
Q

________y contains any backup material that is not necessary in the text of
the document.

A

Appendix

56
Q

Give examples of documentation that should be included in the appendix

A

letters from customers, subcontractors, etc.
leases and contracts
price list

57
Q

The business plan is designed to guide the entrepreneur through the ________________

A

first year of operations.

58
Q

It is important that the implementation of the strategy contain __________ to ascertain progress and to initiate contingency
plans if necessary.

A

control points

59
Q

__________________is not a difficult
or impossible exercise for the inexperienced entrepreneur.

A

Intelligent planning

60
Q

Bankers are the first to admit that few business failures result from a lack of cash but, instead, that
businesses fail because of the entrepreneur’s ________________

A

inability to plan effectively

61
Q

Typically, the business plan projections
will be made on a ____________

A

12-month schedule

62
Q

____________the firm can ensure maximum service to the customer. The faster the firm gets back its investment in raw materials and finished goods, the faster that capital can be reinvested to meet additional customer needs.

A

Inventory control

63
Q

the firm can ensure maximum service to the customer. The faster the firm gets back its investment in raw materials and finished goods, the faster that capital can be reinvested to meet additional customer needs.

A

Production control

64
Q

This will depend on the type of production system but is designed to make sure that the
product performs satisfactorily.

A

Quality control

65
Q

Information on units, dollars, specific products sold, price of sales, meeting of delivery
dates, and credit terms is useful to get a good perspective of the sales of the new venture. In addition, an effective collections system for accounts receivable should be set up to avoid aging of accounts and
bad debts

A

Sales control

66
Q

The new venture should also control the amount of money paid out. All bills should be
reviewed to determine how much is being disbursed and for what purpose.

A

Disbursements

67
Q

With more and more sales being supported or garnered from a company’s Web site,
it is very important to continually evaluate the Web site to ascertain its effectiveness in meeting the
goals and objectives of the plan. There are many services and software packages available to assist
the entrepreneur in this process.

A

Website contol

68
Q

The most effective business plan can become out-of-date if conditions change. e. Environmental factors such as the_______, __________, ________, or __________—and internal factors such as the ________________—can all change the direction of the business plan.

A

economy, customers, new technology, or competition
loss or addition of key employees

69
Q

WHY SOME BUSINESS PLANS FAILS
Generally, a poorly prepared business plan can be blamed on one or more of the following factors:

A

Goals set by the entrepreneur are unreasonable.
* Objectives are not measurable.
* The entrepreneur has not made a total commitment to the business or to the family.
* The entrepreneur has no experience in the planned business.
* The entrepreneur has no sense of potential threats or weaknesses to the business.
* No customer need was established for the proposed product or service

ENTREP (4 decks)

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